An Explanation of the Anti-Flipping Waiver

The recent announcement by the Federal Housing Administration (FHA) that they will extend the waiver of anti-flipping regulations through 2012 is welcome news to the entire real estate industry. But just what are “anti-flipping regulations” anyway?

First, let’s define flipping in this context. Property flipping refers to the practice in which a recently acquired property is resold for a considerable profit. Most property flipping occurs within a matter of days after acquisition, and usually with only minor cosmetic improvements, if any.

In May 2003, FHA and the Department of Housing and Urban Development (HUD) issued regulations stating that any home that was owned for less than 90 days could not be purchased by a buyer using an FHA-insured mortgage.

In 2010, in recognition of the housing crisis and given the large number of foreclosed homes sitting vacant, HUD and FHA realized that allowing investors to buy these homes, fix them up, and resell them quickly for a profit wa

s not such a bad idea after all.

With the extension of the anti-flipping waiver, most investors are working on homes that are catering primarily to the first-time-buyer market. And restoring the value of run-down homes can rid cities of the foreclosure blight while improving overall property values.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

Property Values in the Age of Foreclosures

Home Affordable Foreclosure Alternatives

Homeowners Foreclose on a Bank


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